Gold dips as US inflation data in focus

Gold prices fell slightly on Wednesday as caution prevailed ahead of a US consumer price inflation report that could provide more clarity on the path of US interest rates.

Spot gold fell 0.1% to $2,672.76 per ounce, while US gold futures rose 0.3% to $2,689.70.

“If the CPI data comes in higher, it could lead to gold falling as this somewhat reinforces the view that the Federal Reserve is likely to continue its easing policy from last year into 2025,” said Kelvin Wong, senior market analyst for Asia-Pacific at OANDA, according to Reuters.

Traders are awaiting the data due at 13:30 GMT after last week’s jobs report confirmed the strength of the US economy and prompted traders to scale back bets on further rate cuts.

Gold extended gains on Tuesday after data showed the producer price index rose on an annual basis in December, slightly boosting hopes that the Federal Reserve will continue to cut interest rates this year.